WRITTEN QUESTION E-0817/00

by Juan Naranjo Escobar (PPE-DE), Carlos Carnero González (PSE) and Salvador Jové Peres (GUE/NGL) to the Commission

(21 March 2000)

Subject: Compatibility of Member States' social policies with Community law, particularly with the directives on the award of public works contracts

Article 136 of the Treaty on European Union says that the Community and Member States must have as their objectives the promotion of employment with a view to lasting stable employment and the combating of exclusion. And the conclusions of the Vienna European Council of 11-12 December 1998

confirm that employment is the Union's top priority. Bearing this in mind, does the Commission consider that the Member States' social policies, particularly for the creation of stable employment and the social integration of disabled people, are compatible with Community law, and specifically, with the directives on the award of public works contracts?

Article 30 of Directive 93/37/EC(1) refers to the criteria for the award of contracts. It points out that the persons awarding the contract must base their decision either on the lowest price only or, when the award is made to the most economically advantageous tender, various criteria such as the price, period for completion, running costs, profitability and technical merit. Bearing in mind that these examples do not preclude other award criteria, does the Commission not take the view that the creation of stable employment and jobs for disabled people, as award criteria, could favour the most economically advantageous tender, in the spirit of the Beentjes judgment of the Court of Justice? This allows that the criterion ofthe most acceptable tendermay be compatible with the directive if it reflects the discretion which the authorities awarding contracts have in order to determine the most economically advantageous tender on the basis of objective criteria and thus does not involve an element of arbitrary choice.

Is there not a need to amend Directive 93/37/EC concerning the coordination of procedures for the award of public works contracts, with the aim of clarifying the above concepts, taking account of the European Union's current priorities, to ensure that in this way the Member States can adapt their social measures to meet their citizens' needs?

(1) OJ L 199, 9.8.1993, p. 54.

Joint answer to Written Questions E-0816/00 and E-0817/00 given by Mr Bolkestein on behalf of the Commission

(12 May 2000)

Community directives on the award of public works contracts concern the internal market and are aimed, on the one hand, at optimising the management of public procurement by trying to obtain the best value for money and on the other at ensuring effective competition and equal conditions of access to the contract for all businesses. For this purpose they allow two alternatives for the award of contracts: award to the lowest bid or award to the bid offering the best value for money, the latter being assessed according to a set of objective criteria, some of which are listed as examples in the directives. The objective criteria all refer to the bid in question and provide information on the quality of the offer, but they may not refer to the structure of the business. The case law in the Beentjes judgment referred to by the honourable members specifically rules out the use of social criteria (in this case the employment of the long-term unemployed) as a basis for the award of a contract. The recent conclusions of the Advocate-General in Case C-225/98 support this interpretation. However, as the Commission stated in paragraph 4.4 of its Communication on public procurement of 11 March 1998(1), it follows from this case law that it is possible to require, as a condition for the implementation of public works contracts awarded, the observance of obligations of a social nature, aimed, for instance, at promoting the employment of women or the protection of certain disadvantaged groups. Of course, only those implementing conditions which do not have a direct or indirect discriminatory effect on tenderers from other Member States are authorised. Furthermore, adequate transparency must be ensured by specifying these conditions in the invitations to tender or in the specifications.

Contrary, therefore, to what the honourable members suggest, the implementing conditions may not aim to exclude in advance certain businesses (the directives provide for selection criteria for this purpose), but they can require a commitment on the part of tenderers to take certain measures if the contract is awarded to them. To use the example given by the honourable members, there can be no question of requiring businesses to already have a certain percentage of permanent employees, but they can be asked to undertake to create new permanent posts for implementing the contract once it has been awarded.

Similar considerations apply regarding the use of the number of disabled workers in a business as a tie-breaking criterion. The Advocate-General considered in the above-mentioned case that the use of a subsidiary criterion as a tie-breaking criterion for equivalent tenders resulted in this criterion becoming the only decisive criterion for the award of the contract, which was expressly ruled out in the light of the Beentjes judgment and contravened the directives. On the other hand, nothing would prevent tenderers

being required to undertake to employ, for the implementation of the contract, a number or percentage of disabled workers in accordance with the rules on transparency and non-discrimination regarding nationality. Furthermore, as the Commission pointed out in its above-mentioned communication, the rules in the directives on public works contracts allow applicants that contravene legislation on social matters to be excluded.

During the preparatory work for Council Directive 93/37/EEC of 14 June 1993 concerning the co-ordination of procedures for the award of public works contracts, the Member States specifically expressed their opposition to the introduction of criteria which were not strictly economic for the award of contracts.

The Commission announced in the above-mentioned communication its intention to adopt an explanatory communication on the social aspects of public works contracts. The purpose of this will be to clarify the principles applicable when social objectives are taken into account in the field of public works contracts and the conditions under which pursuit of this type of objective is compatible with the principles and rules of Community law on public works contracts.

(1) COM(98) 143.